A guide to Germany’s new criminal law against betting fraud and match-fixing in sports

In 2005, the German sports world was shaken by a match fixing scandal. The referee Robert Hoyzer (amongst others) put the integrity of German football on the line. Mr Hoyzer had agreed to manipulate at least ten professional football matches in exchange for money. One of these matches was the German Football Federation (DFB) Cup first round match between Hamburger SV (“HSV”) and SC Paderborn 07.

As the latter was playing in the fourth German league at that time, HSV, a club playing in the Bundesliga (the first German Football league) since its inception, was obviously the clear favourite among the betting providers. In order to manipulate this match, Mr Hoyzer obviously and intentionally awarded two penalties in favour of SC Paderborn and a red card against HSV. HSV lost 2:4 and the persons having bet on Paderborn made a fortune. In the following criminal proceedings, Mr. Sapina, who offered and paid the money to Mr. Hoyzer, was sentenced to two years and eleven months in prison for ten cases of fraud by the Federal Supreme Court of Justice (BGH) while Mr. Hoyzer received a sentence of two years and five months for aiding fraud in six cases.[1]

These criminal proceedings revealed difficulties in applying the fraud provisions of the German Criminal Code (GCC) on persons initiating the betting fraud on the field of play – like referees, athletes, etc. In order to adequately and comprehensively cover cases related to betting fraud and other kinds of manipulation of sport events, the German government decided to amend the GCC in November 2013.[2] On 7 March 2017, the governmental draft of the amendments to the GCC was passed by the German parliament, and, on 19 April 2017, the bill came into force.

The bill introduces, among other things, two new Sections to the GCC: Section 265c (“betting fraud in sports”) and Section 265d (“manipulation of professional sports competitions”). The new Sections aim to protect the credibility and authenticity in sporting competitions[3] and the financial/economic interests of clubs, athletes (Section 265d) as well as fair bettors and betting providers (Section 265c).[4] The ideal goal of this legislation is to close the gap in criminal liability left open by Section 263 and completely eliminate any interference with integrity of sports competition through betting fraud and match-fixing.

This article explains the two amended Sections to the GCC and then reviews the main criticisms that the new law has received. Specifically it looks at:

Section 265c GCC – betting fraud in sports

Possible offenders

Possible offences

Sections 265d GCC – manipulation of professional sport competitions

Effects for clubs and the German Football Federation

Criticism

Section 265c GCC – betting fraud in sports

Section 265c allows criminal sanctions in the event that parties agree to manipulate competitions of organized sport related to betting activities and reads as follows:

“(1) An athlete or a coach who demands, allows himself to be promised or accepts a benefit for himself or for a third person in return for the fact that he influences the process or the result of a sports competition in favour of the opponent in the competition and as a result of that an unlawful material benefit will be obtained through a public sports bet placed on this competition shall be liable to imprisonment not exceeding three years or a fine.

(2) Whosoever offers, promises or grants to a athlete or a coach a benefit for himself or for a third person in return for the fact that he influences the process or the result of a sports competition in favour of the opponent of the competition and as a result of that an unlawful material benefit will be obtained through a public sports bet placed on this competition shall incur the same penalty.

(3) A referee or a judge who demands, allows himself to be promised or accepts a benefit for himself or for a third person in return for the fact that he irregularly influences the process or the result of a sports competition in favour of the opponent in the competition and as a result of that an unlawful material benefit will be obtained through a public sports bet placed on this competition shall be liable to imprisonment not exceeding three years or a fine.

(4) Whosoever offers, promises or grants to a referee or a judge a benefit for himself or for a third person in return for the fact that he irregularly influences the process or the result of a sports competition in favour of the opponent in the competition and as a result of that an unlawful material benefit will be obtained through a public sports bet placed on this competition shall incur the same penalty. (…)”[5]

Possible Offenders

Section 265c applies to the manipulation of sports competitions by professional or amateur athletes, coaches (Section 265 c (1) and (2)), and referees or judges (Section 265c (3) and (4)) taking decisions related to competitions. Section 265c (6) provides for a legal definition (which is also applicable for Section 265d GCC according to 265d (6)) of the term “coach” and its second sentence extends the scope of application to persons who have significant influence an athlete, such as doctors, staff members, club owners etc.[6] However, Section 265d (6) does not further specify the term “significant influence” which may lead to interpretation problems which will have to be solved by jurisprudence.

Possible Offences

Section 265c (1) and (3) penalize athletes, coaches or referees for demanding, being promised or accepting a benefit in order to attempt to influence the outcome of a competition for betting purposes. Hence, this new provision creates a clear basis to sanction above-mentioned participants in sports competitions even though they are not directly involved in the betting fraud committed by another party. Sections 265c (2) and (4) penalize parties who offer, promise or grant the benefit to the sportsmen, coaches and referees in exchange for any kind of manipulation.

According to this new regulation it is irrelevant whether the manipulation actually takes place and whether it is successful or not. These facts are obviously very difficult to establish for a criminal court especially considering that it has to apply the strict standard of proof beyond reasonable doubt. Therefore, the legislator decided to criminalize the mere agreement to manipulate a match.[7] The manipulation though has to have the purpose of benefitting an opponent in the competition. Hence, incentive bonuses for the athletes’ or coaches’ own performance in the competition are not covered by this provision. The legislator found that incentives for a particular good performance are in conformity with the idea of sports competitions.[8] Finally, Section 265c requires the realisation of an illicit benefit resulting from a public bet on the manipulated competition to be part of the manipulation agreement. In accordance with Section 265c, a bet is public if it is open to a great number of potential bettors.[9]

Sections 265d GCC – manipulation of professional sport competitions

Section 265d is designed to cover any manipulations of sports competitions not related to betting and stipulates the following:

“(1) An athlete or a coach who demands, allows himself to be promised or accepts a benefit for himself or for a third person in return for the fact that he irregularly influences the process or the result of a professional sports competition in favour of the competition’s opponent shall be liable to imprisonment not exceeding three years or a fine.

(2) Whosoever offers, promises or grants to a athlete or a coach a benefit for himself or for a third person in return for the fact that he irregularly influences the process or the result of a professional sports competition in favour of the competition’s opponent shall incur the same penalty.

(3) A referee or a judge who demands, allows himself to be promised or accepts a benefit for himself or for a third person in return for the fact that he irregularly influences the process or the result of a professional sports competition in favour of the competition’s opponent shall be liable to imprisonment not exceeding three years or a fine.

(4) Whosoever offers, promises or grants to a referee or a judge a benefit for himself or for a third person in return for the fact that he irregularly influences the process or the result of a professional sports competition in favour of the competition’s opponent shall incur the same penalty.

(…).”

According to the above, Section 265d covers agreements to manipulate professional sport competitions. Although many objective elements of Section 265d, like the potential offenders and the punishable conduct, correspond to Section 265c, there are some significant distinctions between the two provisions.[10] Contrary to Section 265c, Section 265d does not require a connection to a sports bet. For instance, Section 265d would apply to match fixing with the purpose to win a championship or to prevent a relegation in a lower division.[11] Furthermore, Section 265d only applies to professional sports competitions (defined in Section 265d (5)). The German government decided that only the impact on sports integrity and credibility caused by a manipulation of professional sports, which have a greater public interest, justify criminal sanctions. Moreover, a specific protection for professional competitions was required because of the high financial implications for the involved parties. Section 265d intends to protect the integrity of the sport and the asset interests involved in professional sports competitions.[12]

A further restriction of the wide scope of application of this provision requires the manipulating influence of the offender to be irregular (in the original German version “wettbewerbswidrig”, i.e. against the spirit of competition). As a consequence, Section 265d does not criminalise agreements benefitting both competing parties at the same time. If two football teams agree to a draw in a match in the group stage of a competition, which would help both teams qualify for the next round, such behaviour would not constitute a violation of Section 265d. [13]

Section 265e, which also forms part of the new provisions, allows judges to increase a sentence in particularly serious offenses of Section 265c and 265d to imprisonment up to five years. These aggravating circumstances include offences that relate to a major benefit received by the offender or commercial acts by the offender or a gang whose purpose is the continued commission of such offences.

Effects for clubs and the German Football Federation

The new criminal liability for betting fraud in sports and manipulation of professional sport competitions also affects club and association officials. If these officials intentionally or negligently fail to take the necessary measures to prevent violations of the new provisions by their employees, they are deemed to have facilitate the violations, which constitutes a regulatory offence under Section 130 of the German Act on Regulatory Offences (“GARO”) which reads as follows:

“Section 130: Violation of obligatory supervision in firms and enterprises

(1) Whoever, as the owner of a firm or an enterprise, willfully or negligently fails to take the supervisory measures required to prevent contravention of duties in the firm or the enterprise which concern the owner in this capacity, and the violation of which is punishable by a penalty or a fine, shall be deemed to have committed an administrative offence if such a contravention is committed which could have been prevented or made much more difficult by proper supervision. The required supervisory measures shall also comprise appointment, careful selection and surveillance of supervisory personnel.”

Violations of this provision can incur fines of up to EUR 1 million.

Under Section 30 of the GARO, clubs and associations themselves could also be sanctioned with the same fine if its officials were found to have violated the aforementioned Section 130 of the GARO.

Criticism

German legal scholars have been extremely critical of the newly implemented changes of the GCC concerning betting fraud in sports and match-fixing for various reasons.

Foremost, critics point out that protecting the integrity of sport is a task of sports itself. The integrity of sports cannot be qualified as a right/interest justifying criminal penalisation, like e.g. the protection of the bodily integrity of humans.

The question was raised: “Why should criminal law intervene in a regulatory capacity concerning sports?”[14] The creation of a criminal offence within the GCC should only be considered as an option to protect basic values of communal life. Therefore, the legislative is considered to be limited to criminalise only behaviour which is unbearable for the social coexistence of the people.”[15] In other words, criminal law can only be the ultima ratio (last resort).[16] Legal scholars accept that the integrity in sport is an important value, but state that the same holds true e.g. for the respect towards elderly people or the protection of the environment. According to these critics criminal law may not be misused for the mere enforcement of certain values. Furthermore, the integrity of sport is considered as too indeterminate to be qualified as fundamental value of our society. [17]

Additionally, critics find that it remains unclear why the manipulation of sports competitions is the only act that is sanctioned in order to protect integrity of sports.[18] They claim that it is inconsistent that the mere promise to manipulate the outcome of a match can now lead to prison time while a severe foul, which also violates fair play and the integrity of sports, does generally not lead to criminal liability.[19]

Scholars further find it inconsistent that cases in which teams agree to a draw for their mutual benefit are not covered by Section 265d GCC. The integrity of sport in these cases is also considered endangered because the outcome of the match is not the result of will to win and fair play, but rather based on taking advantage of the competition set-up. The other teams taking part in the competition, in particular, the competitor that does not qualify for the next round, are harmed by such behaviour.[20]

Summing up, the majority of German scholars are of the opinion that the new laws dealing with manipulation of sports events should not have been implemented as criminal law regulations. The Association for German Lawyers (DAV) advocated to abandon the idea of a new criminal offence and, instead, recommended to implement a sanction under the German Act on Regulatory Offences in order to protect the integrity of sports.[21]

Conclusion

All the mentioned criticism is understandable and also to common when new criminal laws are passed. However, the legal practice in sports shows how difficult respectively impossible it is for sport, i.e. national and international federations to protect themselves from betting fraud and match fixing. Associations simply lack the means to conduct investigations regarding these activities which have are performed by organised criminal groups. Hence, criminalising such activities seems to be a necessary step to protect sports integrity for the benefit of the competing athletes.

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About the Author

Christian Keidel is a salary partner at Martens Lawyers in Munich, Germany. He joined Martens Lawyers as part of the initial spin-off team from Beiten Burkhardt, an international commercial law practice. Christian holds a legal degree from the University of Munich and has also studied at the University of Seville.

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